068 YU PANG CHENG V. CA of dizziness, anemia, abdominal pains and tarry stools.
This
GR No. L-12465 May 29, 1959; Topic: Concealment
Emergency Recit: Yu Pang Eng submitted an application for life
insurance wherein he did not disclose his confinement in Chinese
General Hospital (CGH) and his medical complaints. When he died,
his brother and beneficiary, Yu Pang Cheng, demanded the proceeds
from defendant but the latter refused to pay. The trial court held the
defendant liable but the CA reversed the decision holding that the
insured concealed material facts in his application. The Court affirmed
the CA stating that such concealment deprived the defendant to make
necessary inquiries on the insureds medical history. Based on Sec. 25
of the Insurance Law (IL), A neglect to communicate that which a
party know and ought to communicate, is called concealment
FACTS:
1. On Sept. 5, 1950, Yu Pang Eng applied for a life insurance
declaring that he has no history of any illness (gastritis, ulcer,
stomach diseases, vertigo, cancer, etc.), and that he has never
consulted any physician for such.
2. On Dec. 27, 1950, he entered St. Lukes Hospital for treatment
but he died on Feb. 27, 1951 caused by infiltrating medullary
carcinoma, Grade 4, advance cardiac and of lesser curvature,
stomach metastases spleen as stated in his death cert.
3. His brother and beneficiary, Yu Pang Cheng, demanded
payment of the proceeds of P10k plus interest but was refused.
4. The trial court held the defendant liable. CA reversed the
decision, holding that the insured concealed material facts in
his application.
ISSUE: WON insured is guilty of concealment of facts material to the
risk insured against YES
RATIO:
1. Yu Pang Eng, the insured, entered CGH for treatment on Jan
29, 1950, and stayed there up to Feb 11, 1950. He complained
allegedly started a year ago as frequent dizziness. The
diagnosis made of him showed that the has peptic ulcer.
a. It should be noted that the insured was confined in
CGH prior to his application. It is apparent that the
insured concealed the ailment of which he was treated
in CGH which has direct connection with the
questions propounded in the application.
b. This deprived defendant of the opportunity to make
the necessary inquiry as to the nature of his past
illness. Had the defendant known, the policy would
never have been issued.
c. In fact, according to the death certificate, the insured
died of "infiltrating medullary carcinoma, Grade 4,
advanced cardiac and of lesser curvature, stomach
metastases spleen", which may have direct
connection with his previous illness.
2. Sec. 25 of the IL: A neglect to communicate that which a
party know and ought to communicate, is called concealment
a. Intentional or unintentional, the concealment entitles
the insurer to rescind the contract of insurance (Sec.
26)
b. The insured is required to communicate all the facts
within his knowledge which are material to the
contract, and which the insurer has no means of
ascertaining (Sec. 27)
c. The materiality is not determined by the event but
solely by the probable and reasonable influence of the
facts upon the party to whom the communication is
due (Sec. 30)
3. Argente v. West Coast Life Insurance Co.,
a. Concealment is a ground for rescission of an
insurance contract. If the policy was procured by
fraudulent representations, the contract was never
legally existent.